Kevin's Lawn Care Ltd. has a new mower line that can generate revenues of $100,000 per year. Direct production costs are $50,000, and the fixed costs of maintaining the lawn mower factory are $15,000 a year. The factory originally cost $1 million and is being depreciated for tax purposes over 25 years using straight-line depreciation. Calculate the annual depreciation tax shield is the firm's tax bracket is 35%.
A) None of the above
B) $350,000
C) $918,750
D) $36,750
E) $14,000
Need to Show work and have an explanation of the answer